Toyota Motor Corp. (NYSE: TM) released its sales forecasts for its 2013 fiscal year, which begins in April. The prediction is extremely optimistic. The Japanese firm expects global sales to increase 2% to 9.91 million. The figure assumes that sales outside its home market will more than make up for a near-collapse within Japan.
Toyota expects Japanese sales to fall 15% in the fiscal year to 2.04 million — about one out of five Toyota cars sold. Overseas sales are forecast to be 8% higher to 7.87 million.
The overseas sales numbers have to be based to a very large extent on success in the United States and China, the world’s two largest markets. Without question, Toyota’s sales in the European Union will be troubled, on a percentage basis, probably as much as in Japan. Bloomberg recently reported that EU sales this year will hit a 19-year low and will be down about 10%.
Bloomberg also reports that, while General Motors Co. (NYSE: GM) and Volkswagen vie to become the top car company in China, Toyota’s sales have been limited because of its territorial dispute with China over several islands. Chinese car buyers have expressed their anger about the dispute by shunning the products Japanese car companies.
If China and Europe continue to be deep problems, Toyota has to gamble its fortunes on the United States. It has done reasonably well in the U.S. this year because production that was offline due to the Japanese earthquake has come online again. So Toyota’s car supply in the U.S. has gained velocity. That trigger for better sales will not repeat itself next year.
Toyota’s sales have outperformed the overall U.S. market this year, with sales higher by 28.8%, compared to 13.9% across the industry. Toyota’s total sales of 1,888,361 in the first 11 months put it just behind Ford Motor Co. (NYSE: F), with 2,030,107. Toyota probably will not do as well in 2013, if new models from the Big Three and the other large manufacturers in Japan and Europe can chip away at its share. There is also a very good chance that a drop in consumer spending because of the fiscal cliff could hurt all U.S. car sales.
Toyota’s forecasts for sales in its next fiscal year are much too high. There are no large markets in the world that will do well enough to support them.
Douglas A. McIntyre